October 2013 marks a milestone in the implementation of ObamaCare national health care reform, as a new California public healthcare exchange kicks off its first open enrollment season. We have been monitoring preparations for this event, and offer a sneak preview of coverage in California’s new health insurance marketplace.
Reacting quickly to new federal law (ObamaCare) and guidelines, California is the first state to implement its version of the public health benefit exchange system, named “Covered California.”
What is a Health Benefit Exchange?
CoveredCA Health Plan Benefits Summary
“It is a new insurance marketplace in which individuals and small businesses will be able to purchase competitively priced health plans using ObamaCare federal tax subsidies and credits beginning in 2014,” according to Covered California Director Michael Lujan. Also see www.healthcare.gov.
After attending meetings and listening to new Covered-CA Director Michael Lujan, I have accumulated a personal stack of Post-its, which I find particularly interesting, and I hope you do, too:
Facts & Features of the Covered California Health Benefit Exchange
- There will be separate exchanges for individuals and small business.
- Medical questions will not be asked; all will be accepted.
- Financial questions will be asked only to qualify you for possible subsidies.
- Applicants must be U.S. citizens or otherwise “legally present.”
- The private insurance market will continue to exist and compete with public exchanges.
- Rates & Information can be obtained through certified Assistors and Agents (e.g. Derendinger Insurance).
- An Assistor is limited to providing information on Covered California quotes, whereas a certified agent may provide Covered California quotes as well as quotes from competing private health benefit exchanges and even individual insurers e.g. Kaiser, Aetna. (See updated story on Aetna) Also, a certified Agent can provide ongoing claims assistance and other service issues.
- There is no extra cost to consumers for using the services of an Assistor vs. a certified Agent.
- Open Enrollment is expected to begin in October, with coverage effective January 1st.
- There are four enrollment methods: Paper, Phone, Fax, or Web.
- Public exchanges will limit plans to four categories, Platinum, Gold, Silver, and Bronze, which must line up with a coverage value of 90%, 80%, 70%, and 60%, respectively.
- Participating insurance companies will develop new plans to fit into these “metallic” categories.
- Rates will be updated this summer.
- Rate Bands will vary according to one-year brackets, versus the current 5 or 10 year brackets.
- There may be no greater than a three to one ratio from the most expensive to least expensive age band. (This should present some challenges to the status quo, in my opinion.)
Is The Health Benefit Exchange Marketplace Good for California Consumers?
Paraphrasing Alan Katz, a long-time health industry observer: “The new Covered California Health Benefit Exchange is not going to be as good as some people hope for, yet it is not going to be as bad as others fear.” In between these lines lies the potential of this reform, which include guaranteed medical plans for early retirees, hope for families burdened with pre-existing medical conditions, and affordable healthcare plans for 7 million* uninsured Californians. *California Healthcare Foundation (December 2012)
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Editor’s Note: The Derendinger insurance agency has served the California insurance market for 54 years. Marc can be reached at (408) 252-7300. You may find more information at www.derendingerinsurance.com.